Last week, EU leaders approved the draft new treaty that will bind 25 member states to stricter rules on public finances. Two countries – the UK and the Czech Republic – decided not to join.

... the golden rule ... will force the Labour Party to finally get off the fence and tell us what it really stands for- Simon Busuttil

The new treaty will now be ratified by each of the 25 countries. In our case, a vote needs to be approved in Parliament.

I have already expressed concerns, in this column, on the way this treaty was agreed. Because of the UK’s veto, it was drawn up as an international treaty outside the EU framework. As I see it, this is not the right way to do things in the EU.

I also argued that the same objectives could have been achieved, almost in their entirety, through mere changes in EU law rather than through treaty changes.

Let me add one more concern.

Even on the merits, I think that EU leaders could have done more. For instance, whereas the agreement is strong on deficit reduction it is not strong on debt sustainability and debt reduction. The markets are not so much concerned at high deficits as they are at accumulated debts that some EU countries have piled up over the years and can now ill-afford to pay back.

This explains why the markets were not all that impressed by the new treaty.

Despite my concerns, I agree that this treaty should, on balance, be supported because it contains important rules on achieving a balanced budget, that is, that governments will no longer be able to spend more than the revenue they raise.

This will be done, most notably, through a “golden rule” that will be introduced in the national constitutions of each country, obliging them to achieve a balanced budget, with a deficit not exceeding 0.5 per cent of GDP.

True to his word, upon his return from Brussels, the Prime Minister immediately moved a Bill to introduce this golden rule into our Constitution.

The spotlight immediately turned on the Leader of the Opposition.

Hot on the heels of his failed motion of no-confidence, will he support the golden rule or not? In the event, Joseph Muscat said that the Opposition will support the golden rule. This is welcome news.

The opposition did the right thing in resisting any temptation to trip up the government on what is clearly a matter of national interest. I have no qualms in stating this.

But if he is to be consistent with his support for the golden rule, Dr Muscat must now come clean on two other points that are glaringly contradictory with his new position.

The first contradiction is that the opposition still includes members who are clearly against the golden rule. The most outspoken of them is Alfred Sant.

When the Prime Minister moved the Bill to amend the Constitution, Dr Sant complained that the text of the treaty had not been published. In fact, this was not the case because the draft was published immediately after the agreement was reached.

More worryingly, Dr Sant stated that a constitutional change to implement a balanced budget “could be less than meaningful, indeed counterproductive, for a small island economy like Malta” and that certain government spending would be ok “even if eurozone budget deficit criteria are breached”. To put it simply, Dr Sant opposes the golden rule.

Now Dr Sant is no ordinary member of the opposition. He is a former Prime Minister, a former Leader of the Opposition and also the mentor of Dr Muscat himself.

So if Dr Muscat were Prime Minister today, Dr Sant would not just be dictating his policy on the euro. He would also have a veto on it in Parliament. And where would that leave Dr Muscat’s stability?

So Dr Muscat needs to come clean and tell us which is the real Labour Party. Is it the one in favour of the golden rule as claimed by Dr Muscat? Or is it the one against it as expressed by his mentor, Dr Sant?

There is a second issue on which the opposition must also come clean.

This concerns its mother of all promises, that to reduce water and electricity bills if it is voted into office. For the golden rule effectively means that the Labour Party will now no longer be able to keep its promise. Unless it does one of two things: either reduce government spending in some other areas or introduce new taxes.

But which areas of government spending will face the axe? Will it be education, health, pensions or will it be stipends? You need to know.

Conversely, if Dr Muscat intends to tax you to pay for his promise, he should tell you which taxes he will increase or introduce.

If he does not, he should not blame us for thinking that he is making a promise that he cannot keep.

So, yes, the golden rule is welcome. Very welcome.

For, at the very least, it will force the Labour Party to finally get off the fence and tell us what it really stands for.

simon.busuttil@europarl.europa.eu

Dr Busuttil is a Nationalist member of the European Parliament.

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